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Copyright © Allyn & Bacon 2010
Chapter 13Problems in Politics
and the Global Equality
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Copyright © Allyn & Bacon 2010
Chapter Outline• Capitalism• Socialism• Mixed Economies
Economic Systems
• Uneven Economic Development• Transnational Corporations• Concentration of Wealth• National and consumer debt• Corporate welfare
Global and U.S. Economy
• Democracy• Voter apathy• Political Campaigns• Government
Politics•Functionalist•Conflict•Interactionist
Sociological Perspectives
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Politics and the EconomyPolitics
Social institution where power is acquired and exercised by individuals and groups
Economy Social institution that ensures production,
distribution, and consumption of goods and services
Political Economy Interdependent workings and interests of
political and economic systems
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Three Economic SystemsCapitalism: 4 features of ideal
capitalism- Private ownership of means of production
Own income-producing property and “buy” people’s labor
Pursuit of personal profit People maximize their individual gain through personal
profit
Competition Creates competitive prices, keeps one business from getting
excessive profits
Lack of government intervention Free enterprise policies, gov. doesn’t regulate prices or wages.
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Three Economic Systems, cont.
Socialism Public ownership of means of production
True socialism – means of production owned collectively or by the state, not privately or by corporations
Primary motivation is for collective good of all citizens.
Centralized decision-making Privatization of state owned goods is becoming
commonState still has active role in protecting rights
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Three Economic Systems, cont.
Mixed Economies Combination of both capitalism and socialism (most economies are of this type)
State capitalismGovernment is involved in the dealings of private
companies and help set rules, policies, and objectives.
Democratic socialism (welfare capitalism)Private ownership of some of the means of production
with governmental distribution of essential goods and services Medical care, child care, transportation, etc.
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Problems in Global EconomyInequality occurs globally due to uneven
economic development.
Societies have 1 of 4 different economies:
Pre-industrial Economies:Primary sector production:
Extraction of raw materials and natural resources from the environment
Industrial Economies:Secondary sector production:
Processing of raw materials from primary sector Usually factory and manufacturing work
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Problems in Global Economy, cont.Post-industrial Economies:
Tertiary sector production Providing services rather than goods Transportation, communication, education,
advertising, entertainment
In advanced industrial societies there is great dependence on an international division of labor.
Outsourcing of work for cheaper wages.
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Problems in Global Economy, cont.
Transnational Corporations and the Lack of Accountability:Transnational corporation (TNC): Large-scale business
organizations headquartered in one country but operating in many countries Currently TNC account for 25% of total world production.
TNC are big and powerful and play significant role in economies and governments of many countries.
Most shareholders have little control over location of plants wages, or treatment of environment where factories are located.
They tend to lack accountability to any government or regulatory agency.
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Problems in U.S. EconomyConcentration of Wealth: (can be traced through several
stages.)
(1850-1890)Earliest stage :Investment capital individually ownedFamilies such as: Carnegie, Vanderbilt,
Rockefeller
(1890-1940) Monopoly Capitalism:Control of capital shifted to corporationsMonopoly: single firm controls an industry and
accounts for all sales in a specific market.
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Problems in U.S. Economy, cont.(1940 –today) Advanced Monopoly Capitalism
Ownership and control of industry and business highly concentrated
After WWII rise in Oligopoly: small number of companies control an entire industry or service.
Mergers often create monopoly situations
Problem today with interlocking corporate directorates: members of the board of directors of a corporation also sit on the board of one or more other corporations.Diminish competition by producing interdependence.
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Problems in U.S. Economy, cont.National Debt: amount of money owed by the
federal government to creditors.Aug. 2008: U.S. debt was $9.6 trillionNational debt continues to grow
Consumer Debt: individual debt due to loans and credit cards.As of 2008, it was $2.52 trillionPrivate problem becomes public issue when
people can’t pay back their debts
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Problems in U.S. Economy, cont.Corporate welfareWhen government helps industries and private
corporations in their economic pursuits Subsidies to farmers, tax credits for corporations.
Potential ProblemsWhen subsidies originally put in place to stabilize
the economy continue unnecessarily because of labor union and lobbying and campaign contributions
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Political ParticipationPolitics: social institutions through which
power is acquired and exercised by some people or groups.
Primary political system in contemporary societies have is government: formal organization that has legal and political authority to regulate relationships among people in a society and between society and others outside its borders.
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Problems in U.S. PoliticsU.S. is a Democracy:Political system where the people hold the ruling
power through elected representation
Direct participatory democracy Meet and debate issues
Separation of powersAmong legislative, executive, and judicial branches
Checks and balancesAll branches have some involvement in the others
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Problems in U.S. Politics, cont.Voter apathyUndermines representative demography. If many
do not vote, the interests of only a few are represented
Gender gapDifference between a candidate’s number of
votes from women and menWomen and men seem to view social and
economic issues differently
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Problems in U.S. Politics, cont.Politics and Money in Political Campaigns:
Political action committees (PACS) Fund campaigns to elect or defeat candidates on the basis of their
positions on specific issues
Individuals, unions, and corporations have circumvented the law through the soft money loophole Contributing to a political party instead of a specific candidate
and through PACs
Contributions can make the difference between success or defeat
Violations are rarely punished but if they are it is well after an election is over.
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Problems in U.S. Politics, cont.Government by Special-Interest Groups:
Special interest groups exert influence on single issues (environment, gun control)
Make contributions to candidates who will protect their interests and profits.
Government by Bureaucracy:Permanent government: top tier civil service
bureaucrats with strong power base who affect policies
Persists even as presidents come and go
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Problems in U.S. Politics, cont.Military-Industrial Complex:
Refers to the inter-dependence of the military establishment and private contractors
Involves private interest groups that manufacture military related goods, members of Congress that appropriate money for military programs and bureaucratic agencies (such as Defense Dept.)
U.S. will always have an active military-industrial complex because of our focus on military ideals and significant preparedness for war.
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Sociological Perspectives
Functionalist:Government plays 4 functions:
Maintains law and order Plans society and coordinates other institutions Meets social needs Handles international relations
Pluralist Model: power is widely dispersed through many competing interest groups
Problems can be solved by identifying dysfunctional elements and correcting them
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Sociological Perspectives, cont.ConflictElite Model: power is concentrated in a small
group; the masses are relatively powerless
U.S. is ruled by Power elite (C. Wright Mills) includes top business leaders, executive branch of government, and the military “top brass”
Way to overcome problems in politics and economy is to change the entire system.